Ackman quits J.C. Penney board

By Dan Berthiaume

New York -- J.C. Penney Co. announced that activist investor and hedge fund manager Bill Ackman has resigned from the board of directors of the company, effective Aug. 12. His resignation comes in the wake of a very public and heated campaign in which he called for the ouster of Penney interim CEO Myron Ullman and chairman Thomas Engibous.

Penney said that retail veteran Ronald W. Tysoe, who spent 16 years as vice chairman at Federated Department Stores Inc. (now Macy's, Inc.), has been elected to the board, effective Aug. 12. Penney’s board also "reaffirmed its overwhelming support" for Ullman and Engibous.

“The company is extremely fortunate to have the benefit of Ron Tysoe's judgment and experience at this important time,” Engibous said. “His deep knowledge of the retail industry and his financial expertise will be invaluable to us as we continue the work underway to return J. C. Penney to profitability and growth. I would like to thank Bill Ackman for his service on the board over the past two years."

In addition, Penney’s board said that it intends to name another new director in the near future.

Ackman, whose Pershing Square Capital Management owns about 18% of J.C. Penney and is the company's biggest shareholder, told CNBC he had made some important issues public and the board would now function better without him.

In a statement released by Penney, Ackman said: “During my time on the J.C. Penney board of directors, I have always advocated for what I believe to be in the best interests of the company — its stockholders, employees and others. At this time, I believe that the addition of two new directors and my stepping down from the board is the most constructive way forward for J.C. Penney and all other parties involved.”

Longtime retail analyst Walter Loeb, of Loeb Associates, said Ackman's presence on the board had been disruptive, Bloomberg reported.

“He caused so much uncertainty in the company,” said Loeb. “Tysoe is well regarded in the retail industry and will bring a calm, measured company...”

Although some analysts noted that Ackman's resignation will give Pershing Square more latitude to begin selling its stake in the company, Ackman seemed to brush off the idea in his interview with CNBC.

“If I wanted to sell I could have sold all along during the quarterly window,” Ackman told CNBC.